Clarifications on detailed basic principles for administration of justice sector, legislative powers, financial commission, taxation and funds allotment made at National Convention According to detailed basic principles, seven regions, seven states and Union territories will emerge in the Union of Myanmar

Yangon, 21 May - The following is a translation of clarifications concerning detailed basic principles for administration of justica and financial matters that are to be included in drafting State Constitution made at the National Convention today.

Clarifications of National Convention Convening Work Committee Chairman Chief Justice
U Aung Toe

Administration of justice sector Respected Chairman,

I will now clarify matters concerning administration of justice. Of the basic principles already laid down by the National Convention, one of the aims and objectives of the State calls for 'Further burgeoning of the noblest and worthiest of worldly values namely justice, liberty and equality in the State'. The basic principle is an essential right of all the citizenry residing in the nation. Different levels of court and judges are to take special care to see that our citizens do not lose that right. Moreover, basic principles calling for independent administration of justice in accord with law; administration of justice in public except where restricted by law; and giving of the right of defence and the right of appeal by law in cases are laid down. In accordance with the basic principles laid down by the National Convention, judges at different levels of court are to practise the uniform laws for the people residing in the nation regardless of the rich or poor, position or class in passing judgements. They will not have the right to administer justice as they please. To be able to keep the machinery of administration of justice in operation, the judges need to be well-versed in judicial affairs and efficient. At the same time, they need to be morally upright, free from bias and bribery. They must be bold enough to pass judgements correctly. If such efficient and qualified judges administer justice they will win the trust and reliance of the public all the more.

Matters concerning administration of justice I have explained should be included in the Union Legislative list to enact laws, as necessary.

Respected Chairman,

Other matters covered by the administration of justice are those concerning lawyers, penal laws and procedures to be followed in hearing the cases, civil laws and procedures to be followed in hearing civil cases and the Evidence Act which is to be followed in hearing criminal and civil cases. Moreover, there are other provisions that need to be followed in hearing specific cases. They are: matters concerning contract, arbitration, civil wrongs, insolvency, Trust and people who can administer because of the Trust, administrator, inheritance, family laws, transfer of property, guardians and wards and specific reliefs.

In the course of filing civil cases at courts, valuation of the suit has to be determined in consideration of the jurisdiction.

Stamp duty is to be paid according to the value thus determined. Moreover, although there is no prescription on the limitation for filing a case in criminal matters, a limitation is determined in connection with filing a civil case. In submitting amendments in connection with civil appeal cases, amendments and criminal appeal cases, it is to be done during the prescribed limitation. The right to file a case, to appeal and to amend will normally be lost if the limitation expires.

In administering the judicial matters I have explained above, different levels of the court or judges are to act in the manner of uniformity throughout the nation in accordance with the judicial powers vested in them. If there arises the need to make an exception in connection with the matters stated above or a specific case in an area in the country due to the condition and time, exceptions for that area are to be mentioned in enacting laws. Hence, it should be included in the Union Legislative list to enact laws, as necessary, in connection with these matters.

Matters covered by the administration of justice include foreign jurisdiction, overseas jurisdiction, robbery at sea, and crimes committed on land or in the international waters or in space in violation of the international laws. Concerning these matters, constitutions of certain nations state that legislative power is vested in the central level legislative bodies. In the 1947 Constitution of the Union of Myanmar, such matters are stated in the Union Legislative list. Such cases may also concern foreign nations. It should therefore be included in the Union Legislative list to enact laws, as necessary, in connection with these matters.

When the courts established in the country hear criminal or civil cases, the plaintiffs have the right to hire lawyers who need to strictly and precisely abide by the disciplines while upholding their morals. In fact, lawyers are responsible for assisting the courts in investigating and extracting the truth. There are matters such as taking of action against lawyers who breach morals, and granting permission to them to practise law at courts. There should be a common practice and uniformity in all areas throughout the country concerning these matters. It should therefore be included in the Union Legislative list to enact laws, as necessary, in connection with lawyers.

Respected Chairman,

Matters I have just explained and points stated below are to be discussed whether to lay down the detailed basic principles to include in the Union Legislative list.

1. Administration of justice

2. Lawyers

3. Penal laws and procedures

4. Civil laws, contract, arbitration, civil wrong, insolvency, Trust and people who can administer because of the trust, guardians and wards, transfer of property and inheritance

5. Evidence Act

6. Limitation

7. Valuation of suit

8. Specific relief

9. Foreign jurisdiction

10. Admiralty jurisdiction 1

1. Robbery at sea, and crimes committed on land or in the international waters or in space in violation of the international laws. Clarifications of National Covention Convening Work Committee Member Civil Service Selection and Training Board Chairman Dr Than Nyun Legislative powers of the self-administered area leading bodies

Respected Chairman,

I will now present delegation of legislative powers designated by the State Constitution to the self-administered areas.

The National Convention, in accordance with the basic principles laid down, has designated one self-administered division and five self-administered zones.

In connection with the enactment of law for the self-administered areas, a basic principle has been laid down  - the legislative powers of the State is distributed among Pyidaungsu Hluttaw, Region Hluttaws and State Hluttaws. Legislative power stipulated by the State Constitution shall be distributed to self-administered areas. In connection with the bodies which will exercise the legislative power delegated to the self-administered areas, it is stated  - the self-administered division leading body and the self-administered zone leading body of the respective self-administered division and zones will be constituted and these leading bodies exercise the legislative powers delegated by the Constitution.

According to the detailed basic principle, it is required to prescribe in the Constitution which type of legislative powers are to be delegated to the self-administered areas. In studying the type of legislative powers to be delegated to the self-administered areas, it is important that such powers should be those the legislative leading bodies can manage.

In the self-administered areas, there reside not a single national race, but numerous national races. In enacting laws for the respective self-administered areas, emphasis is to be placed on serving the interest of the public encompassing all the national races residing in the self-administered area concerned.

Members of the self-administered division leading body or self-administered zone leading bodies are mainly responsible for the development of the respective division or zones. They are to take care of health, smooth transport, high level of education and better condition of the basic needs of the people depending on the conditions of their areas. Appropriate legislative powers are to be delegated to them to enable them to carry out the duties. Hence, in connection with delegation of legislative power to the self-administered areas, a detailed basic principle delegating the legislative powers to the self-administered division or self-administered zone leading bodies should be laid down for the following matters:

(a) Town and village plan

(b) Building, repair and maintenance of roads

(c) Public health

(d) Development affairs

(e) Fire prevention

(f) Pasture

(g) Forest protection and conservation

(h) Environmental conservation

(i) Water and electricity supply in towns and villages

(j) Town and village markets National Convention delegates are to discuss and make suggestions on whether to lay down detailed basic principles in the Constitution on delegation of legislative powers to the self-administered division or zone leading bodies in connection with the above matters. Delegation of power in connection with matters not stated in the legislative lists of the Union, Region or State, and self-administered division or zone leading bodies

Respected Chairman,

I have clarified legislative powers that should be vested in the Pyidaungsu Hluttaw, Region or State Hluttaws and self-administered division and self-administered zone leading bodies. The world today is advancing and changing in all aspects and our nation, too, needs to strive to achieve progress like others. To be able to do so, there may rise the need to enact laws in addition to those enacted in exercise of the legislative powers delegated to the respective Hluttaws and to the self-administered division and zone leading bodies in consideration of the unforeseeable circumstances in future. If such occasion arises, legislative power should be vested in the Pyithu Hluttaw made up of the representatives from all over the country.

Hence, National Convention delegates are to discuss and make suggestions on whether to lay down detailed basic principles on 'Legislative power is vested in the Pyidaungsu Hluttaw in connection with other matters not stated in the legislative lists of the Union, Region or State, and self-administered division or zone leading bodies'. Legislative powers of Union territories

Respected Chairman,

I have clarified detailed basic principles in connection with legislative powers that should be distributed and vested in the Pyidaungsu Hluttaw, Region Hluttaw or State Hluttaw, Self-administer Division Leading Body or Self-administered Zone Leading Bodies.

I will now explain the findings of the National Convention Convening Work Committee in connection with delegation of legislative powers to the Union territories.

The National Convention has laid down detailed basic principles including 'The State is constituted by Pyidaungsu (Union) system' and 'The State is delineated and constituted with the seven regions and seven states' in the 'State Structure'. Moreover, in connection with the designation of the Union territories, detailed basic principles have been laid down as follows:

(a) Yangon City, that is the Capital of the Union, is designated as Union territory placed under direct administration of the President of the Union,

(b) Cocogyun Township which has a special situation is designated as Union territory and placed under direct administration of the President of the Union,

(c) If the need arises to delegate areas that have special situation in connection with national defence, security, administration, economy etc. as Union territories they may be so designated as Union territories after enacting laws.

Concerning constituting the Union, detailed basic principles have been laid down as follows: - villages are organized into village-tract, - wards are organized into town or township, - village-tracts and wards or towns are organized into township, - townships are organized into district, - districts are organized into region or state, - in a self-administered zone townships therein are organized into the self-administered zone, - in a self-administered division townships therein are organized into district and districts are organized into the self-administered division, - if there be self-administered division or self-administered zone in a region or a state, the self-administered division, self-administered zone and districts are organized into region or state, - regions, states and Union territories are organized as the Union.

According to the detailed basic principles already laid down, if an area is designated as Union territory, it will be under direct administration of the President of the Union and not under the administration of the Region or State concerned considering its special situation .

Although the Union territories will be under the direct administration of the President of the Union, laws enacted by the Pyidaungsu Hluttaw in accordance with the legislative powers duly vested in it will be in force in these territories since they are situated in the Union.

According to the detailed basic principles laid down by the National Convention, Union territories Hluttaw representatives are not included in the Region Hluttaws or State Hluttaws but are included only in the Pyidaungsu Hluttaw, the highest legislative body comprising the Pyithu Hluttaw and Amyotha Hluttaw; as such if the need arises to enact laws in the Union territories in connection with matters for which legislative powers are delegated to the Region or State Hluttaws or the self-administered division or zone leading bodies, legislative powers to do so should be vested in the Pyidaungsu Hluttaw. Hence, discussions and suggestions on whether to lay down detailed basic principles are to be made concerning 'if the need arises to enact laws in the Union territories in connection with matters for which legislative powers are delegated to the Region or State Hluttaws or the self-administered division or zone leading bodies, Pyidaungsu Hluttaw shall enact the required laws'. Taking effect of laws enacted by different levels of Hluttaw and self-administered area leading bodies I will now clarify matters in connection with taking effect of the laws enacted by different levels of the Hluttaw and the self-administered area leading bodies. The said legislative bodies are to enact necessary laws, with the legislative power delegated to them, in accordance with the objectives and essence stipulated in the Constitution. But if the laws are different from one another in different regions, the people will not be able to enjoy equal rights in the legal affairs, and in addition, they will adversely affect the national unity more or less. In enacting laws, with Our Three Main National causes as the core, it is required to observe the laws promulgated by the legislative bodies at higher levels if there are contradictions between the enacted laws.

Generally, a law promulgated by the Pyidaungsu Hluttaw will be in force in the whole country, while laws enacted by a region or a state will be in force in the respective region or state, and those enacted by a self-administered division or a self-administered zone will be in force in it. And, if the laws enacted by the legislative bodies are in contrast with the laws promulgated by the Hluttaws at higher levels, only the stipulations contained in the laws of the higher levels must be observed. Only then, will the people be able to equally enjoy the benefits of the law.

Thus, if any one of the provisions stipulated in a law enacted by the leading body of a self-administered division or a self-administered zone is in contrast with any one of the provisions contained in a law enacted by the respective region Hluttaw or state Hluttaw, adherence to the law must be in accord with the stipulations contained in the law enacted by the region Hluttaw or state Hluttaw; if any one of the provisions in a law enacted by the leading body of a self-administered division or a self-administered zone is in contrast with anyone of the stipulations in a law enacted by the Pyidaungsu Hluttaw, observance of the law must be in accord with the stipulations contained in the law enacted by the Pyidaungsu Hluttaw; and if any one of the provisions stipulated in a law enacted by a region Hluttaw or a state Hluttaw is in contrast with anyone of the stipulations in a law enacted by the Pyidaungsu Hluttaw, observance of the law must be in accord with the stipulations contained in the law enacted by the Pyidaungsu Hluttaw.

Furthermore, the State machinery will continue to run smoothly only if the current existing laws continue to be in force after the adoption of a new constitution, until they are revoked or amended by the Pyidaungsu Hluttaw, and unless they are in contradiction with the new Constitution. I have presented the matter to enable delegates to discuss and give suggestion on whether detailed basic principles concerning the following five factors are to be laid down or not:

1. If any one of the provisions stipulated in a law enacted by the leading body of a self-administered division or a self-administered zone is in contrast with any one of the stipulations contained in a law enacted by the respective region Hluttaw or state Hluttaw, adherence to the law must be in accord with the stipulations contained in the law enacted by the region Hluttaw or state Hluttaw.

2. If any one of the provisions stipulated in a law enacted by the leading body of a self-administered division or a self-administered zone is in contrast with any one of the stipulations contained in a law enacted by the Pyidaungsu Hluttaw, observance of the law must be in accord with the stipulations contained in the law enacted by the Pyidaungsu Hluttaw.

3. If any one of the provisions stipulated in a law enacted by a region Hluttaw or a state Hluttaw is in contrast with any one of the stipulations contained in a law enacted by the Pyidaungsu Hluttaw, observance of the law must be in accord with the stipulations contained in the law enacted by the Pyidaungsu Hluttaw.

4. If any one of the provisions stipulated in a law enacted by the Pyidaungsu Hluttaw or a region Hluttaw or a state Hluttaw or a self-administered division or a self-administered zone or any one of the existing laws is in contrast with any one of the stipulations contained in the Constitution, observance of the law must be in accord with the stipulations contained in the Constitution.

5. The existing laws are still in force until they are revoked or amended by the Pyidaungsu Hluttaw, and unless they are in contradiction with the Constitution.

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Clarifications of National Convention Convening Work Committee Vice-Chairman Attorney-General U Aye Maung and National Convention Convening Work Committee Secretary U Thaung Nyunt Formation of Financial Commission, Taxation and funds allotment among the Pyidaungsu and Regions or States in drafting the State Constitution

Respected Chairman,

I will now explain the matters relating to the formation of Financial Commission to draw budget of the Union and that of the regions or states, and the detailed basic principles that should be laid down for the matters concerning taxation in the Pyidaungsu and the regions or states, and the distribution of funds among them. Expenditure is needed for progress of political, defence, administration, the rule of law, economy and social sectors of a nation. A nation has to earn funds and to distribute them systematically. The people also have the duty to pay due taxes in accord with the law for the nation to earn revenues. The State machinery is being run smoothly and effectively, with the use of revenues, there by improving the living standard of the people and ensuring security of life and property. A nation usually employs ways and means that are in conformity with the economy, social conditions, culture and customs, for taxation and use of funds.

Respected Chairman,

In Myanmar Naing-Ngan, tax has been collected since the time of Myanmar kings. In connection with tax collection, it was stated in the Governance of Myanmar and Rajathat or the edith of King Bodaw Phaya, and the following is a rough translation: ÔA neighbouring country may intrude into and destroy another in order to loot the latter's riches to make itself rich and prosperous. In one's country itself, rogues and robbers may attack others and steal the property of others. In such a disquiet state, no merchants can do business in peace, nor the farmers work the land. 'There should be officers, assistants, attendants and guards in order to keep trade, commerce and day-to-day business undisturbed. The king, ministers, warriors and soldiers along with the officers, assistants, attendants and guards defend the nation and keep order. Having to do so, they have no time to do business or work the land. Hence, tax in the form of paddy, rice or money is to be collected from the merchants and farmers to provide sufficient supply of food for them, to acquire arms and ammunition, to establish human settlements, and to store supplies to get ready in times of war. That is called thatthameda tax or tithe.'

Respected Chairman,

After invading and occupying Myanmar, the colonialists enacted laws and issued orders at will to collect taxes from the people. They also promulgated laws to extract the natural riches of Myanmar and exploited the country in their own interest. The nation, after regaining independence, adopted and practised the 1947 Constitution. The Constitution stipulated the list of revenues the states were permitted to collect; and the states coordinated with the Union Government concerning the issue of financial deficit or surplus in their budgets. In the 1974 Constitution, a common fund for the whole Union was set up, and the central allotted appropriate funds for the states and divisions. Concerning the collection of revenues allotment of funds for the Union Government and the states in accord with 1947 Constitution, the Article 96 states as follows: 1. All revenues from the sources enumerated in the Fourth Schedule to this Constitution shall form part of the revenues of the State in or by which they are raised or received. 2. All revenues other than such as are assigned to the State by the last preceding sub-section shall form part of the revenues of the Union. Probiso: Provided that the Union may make such grants or contribu tions out of its revenues in aid of the revenues of the units as it may determine to be necessary upon the recommendations of any Board or other authority appointed for the purpose. The previous Hluttaws formed financial committees in accord with the stipulations to do their job. When the constitutions of former colonies are studied, it is found that the state governments are permitted to collect the prescribed taxes, and the central government is providing financial assistance to correct their deficits; and that financial commissions are formed to make detailed scrutinization and ap proval concerning the allotment and provision of funds and borrowing of loans for state governments by the central government.

Respected Chairman,

 According to detailed basic principles laid down by the National Convention, seven regions, seven states and Union territories will emerge in the Union of Myanmar. In addition, there will be the Union Government, the region government and the state government, and ways and means that are inconformity with the changes should be laid down and practised in sharing financial rights and authority with the governments. Fair and appropriate means should be practised in sharing financial rights and authority among the Union Government, the region government and the state government for the progress of the whole nation.

Respected Chairman,

At present, efforts are being made with might and main to swiftly transform from manual farming to mechanized farming in the Union of Myanmar. It is a common knowledge for delegates that the State, on its part, is building necessary dams, irrigation networks in the whole nation, and is achieving success in the endeavour. It is also lay ing down plans to systematically utilize and conserve the nation's rich natural resources including forests and minerals. We will be able to maintain the momentum of national development and modernization drive in the future also, if the Union builds infrastructures, that are specially needed for the nation, as necessary. It is also required to entrust a fair degree of financial rights and authority to the Pyidaungsu to enable it to raise enough revenues to build infrastructures for the nation and to systematically develop the whole Union and improve the food, clothing and shelter condition of the entire people. The delegates have witnessed the unprecedented national re-consolidation achieved in the country. Provisions concerning appropriate and fair distribution and use of financial rights and authority be tween the Pyidaungsu and the regions or states should be stipulated in the future constitution. Financial rights and authority include taxation and financial expenditure and that will contribute to perpetuation of nation alunity. The National Convention should lay down detailed principles.

Respected Chairman,

Roughly, the State financial budgets of the previous years show that in most of the states and divisions, their expenditure was larger than their revenues. The State by providing funds to correct their deficits is ensuring fair use of the revenues collected in the whole country. In the future also, the revenues collected by the Pyidaungsu will be used for the whole Union in cluding regions and states. Taxes permitted to be collected by the regions or states will be used in them. The following list shows the type of taxes that should be collected by the regions or states: (a) Land tax (b) Excise tax (c) Water taxes and dam taxes based on dams and reservoirs managed by the regions or states, and fees for electricity generated by hydro power of the dams and reservoirs. (d) Toll fees from roads and bridges managed by the regions or states (e) 1. Royalty on fresh water fishing industry 2. Royalty on sea fishing within the limited distance (f) Taxes collected in accord with the law concerning vehicles and vessels in regions or states (g) Proceeds, rents or profits from property owned by regions or states (h) Fees, taxes and other revenues fixed by regions or states for service enterprises (i) Fines imposed by law courts in regions or states including the Region Hluttaw or the State Hluttaw, taxes on services and other revenues (j) Interest from loans disbursed from the region or state funds (k) Profits and benefits from investments of regions or states (l) Taxes on extraction of the following forest products from the forests in the regions or states: (1) Taxes on timber except teak and other designated hardwoods (2) Taxes on fire wood, charcoal, rattan, bamboo, birdnest, cutch, thanatkha, turpentine, eaglewood and honey products (m) Registration fees (n) Taxes on entertainments (o) Salt tax (p) Funds received from Union Fund Account (q) Contributions of the development affairs bodies to regions or states (r) Unclaimed cash or property (s) Treasure trove

Respected Chairman,

 I have already explained the types of taxes to be contributed to the region or state funds. Of them, I will gave a brief account of the revenues that are needed to be explained. Land revenues of the regions or states cover all other agricultural land owned by the State including cultivation land, farm land, taungya (slash-and-burn cultivation) farms, seasonal cultivation land, and gardens and plantations, except from those used for enteprises under the direct management of the State.

The term 'excise' is a general word for taxes on all forms of alcoholic liquors and intoxicating drugs permitted in accord with the law. It comprises taxes on all forms of alcoholic liquors, alcohol and substances inclusive in the intoxicating drugs and matters that are carried out in accord with Narcotic Drugs and Psychotropic Substances.

Respected Chairman,

At present, toll fees from bridges and dams built by the State are being collected by the respective departments in accord with the law. After the adoption of a new Constitution, there will also be dams, reservoirs and hydroelectric power stations under the direct management of Pyidaungsu as well as dams, reservoirs and hydroelectric power stations that are under the management of the regions or states. The regions or states should be allowed to collect and use the revenues on water and dams based on dams and reservoirs under their management and control and fees on electricity generated by hydro power of the dams. Thus, the matter concerning 'water taxes and dam taxes based on dams and reservoirs managed by the regions or states, and fees for electricity generated by hydro power of the dams and reservoirs' is stated in the list of taxes permitted to be collected by the regions or states.

Respected Chairman,

The State has built roads and bridges at its own expense, and the respective departments are collecting the toll fees for using the facilities. When the Constitution comes into force, there will be Union highways and bridges supervised by the Pyidaungsu as well as roads and bridges that will be permitted to be managed and maintained by the regions or states. As the respective regions or states are permitted to collect and use the toll fees on roads and bridges managed and main tained by them, he wording 'Toll fees on roads and bridges that are permitted to be managed and main tained by the respective regions or states' is stated in the list.

Respected Chairman,

Royalties on fresh water fisheries in the regions or states will be received by the respective regions or states. Some of the regions or states are lying contiguous to the sea, and the citizens living in the areas earn their living by engaging in sea fishing. To enable them to earn their living well, the area of sea surface, where fishing rights have been permitted, should be designated by the law. The regions or states are permitted to collect and use the royalties on fishing within the limited sea area. 'Royalty on fresh water fishing industry; and Royalty on sea fishing within the limited distance' is stated in the list of taxes permitted to be collected by the regions or states.

Respected Chairman,

Concerning transportation, the volume of the transport activities of both the State sector and the private sector is growing together with the rate of national development. The private sector has a large number of motorized vessels transporting passengers and goods on rivers, creeks and lakes and tractors, motorized vehicles and slow-moving vehicles in the road transport sector. It is re quired to control and supervise the vessels and vehicles and to collect taxes on them. As the regions or states are permitted to collect and use taxes on the vessels and vehicles, the list states 'Taxes collected in accord with the law concerning vehicles and vessels in regions or states'.

Respected Chairman,

Concerning forests, some of the forest reserves are located straddling the borders of regions or states. Thus, the borders of some forest reserves are not in conformity with the borders of the regions or states. Due to the naturallocation and situation of forests, the tasks of conservation and prevention of forest depletion, systematic extraction of timber, reforestation of depleted forests, and plantation of trees to restore land, water and natural environment will develop and achieve success only if it is systematically carried out in the whole Union. Taxes on hardwoods other than teak and designated timber species yielded by the conserved forests, forest products in cluding fire wood, charcoal, rattan, bamboo, birdnest, cutch, thanatkha, turpentine, eaglewood, honey products should be collected by the regions or states for their funds. Thus the statement: 'Taxes on timber except teak and other designated hardwoods: and Taxes on fire wood, charcoal, rattan, bamboo, bird nest, cutch, thanatkha, turpentine, eaglewood and honey products' is included in the list. Concerning registration fees, as registration fees for contracts and agreements and other registration fees should be paid to the funds of regions or states, the statement 'Registration fees' is in cluded in the list. As matters regarding other taxes are obvious, they will not be clarified.

Respected Chairman,

One of the State objectives is, 'Development of agriculture as the base and all-round development of other sectors of the economy as well.' In accord with the objective, we will have to strive for development of agriculture as the base and all-round de velopment of other sectors of the economy as well to catch up with other countries in terms of economy. Equitable progress will be achieved in the whole Union only if the regions or states implement tasks that are within their capacity, and the Pyidaungsu the remaining major projects. Regions or states will need funds to develop themselves. Concerning the matter, I have already explained types of revenues and taxes to be collected by the regions or states to receive funds for the endeavours. If their tax revenues are not enough for their development undertakings, the Pyidaungsu funds will provide there quired funds. And if funds provided by the Pyidaungsu is not enough yet, extra funds will be provided to them as a special case after checking the State budget. Moreover, if the regions or states need funds to implement small projects in them, they can borrow loans after coordinating with the Pyidaungsu.

Respected Chairman,

It is needed for the regions or states to set up funds for their development endeavours. So also, the Pyidaungsu also needs funds to use them in implementing major projects and tasks and providing funds to regions or states, and financial assistance and loans to them for progress of the whole Union. Thus, taxes that should be collected by the regions or states should be designated, and the Pyidaungsu should collect the rest.

Respected Chairman,

I will now explain the taxes to be collected and received by the Union territories. According to the detailed basic principles already laid down, if an area is designated as Union territory, it will be under direct administration of the President of the Union of Myanmar and not under the administration of Region or State concerned considering its special situation. As Union territories will be under direct administration of the President, if it becomes necessary for them to collect taxes and revenues as required by the regions or states, Pyidaungsu will have to collect the revenues and and contribute to the Union Fund Account.

Respected Chairman,

Now, I have already explained the matters relating to the list of taxes that should be collected by the Pyidaungsu, and the regions or states. Taxes and revenues, collected by the Pyidaungsu for proportionate development of the whole Union and those collected by the regions or states for their development, should be used in accord with the law. There will be a Pyidaungsu budget to bear the expenditure of the Pyidaungsu. The budget will include revenues collected by the Pyidaungsu and other earnings. There will be expenditure for building Union highways, bridges, infrastructures for energy, construction, communications sector supporting the economy, health and education infrastructures supporting the social sector all over the nation. Budgets for the Pyidaungsu ministries that will implement the tasks as well as budgets for the regions or states must be drawn. The budgets of the Pyidaungsu level organizations including the Pyidaungsu ministries must be checked by a group led by a Vice-President of the State assigned by the President of the State. Another Vice-President assigned by the President, will have to check the budgets of the regions and states presented to him by Chief Ministers of the respective regions or states after check ing the budgets. In this way, there will be budgets of the Pyidaungsu level organizations including the Pyidaungsu ministries as well as those of the regions and states separately checked by the two Vice-Presidents, and they will be submitted to the Financial Commission formed with the following persons: 1. The President Chairman 2. The Vice-Presidents Vice-Chairmen 3. The Pyidaungsu Attorney-General Member 4. The Pyidaungsu Auditor-General Member 5. The Chief Ministers of Regions and States Members 6. The Yangon City Council Chairman Member 7. The Pyidaungsu Minister for Finance Secretary The Financial Commission after checking the budgets of Pyidaungsu level organizations including the Pyidaungsu ministries and of the regions and states will appropriate funds. The appropriations also include funds, financial aids and loan to be provided by the Pyidaungsu for development undertakings of some regions or states which require extra funds. The President will seek advice of financial experts in compiling and checking the budgets. After drawing of the Pyidaungsu Budget bill comprising the appropriations, the President or a person as signed by the President will have to submit it to the Pyidaungsu Hluttaw, on be half of the Pyidaungsu Government.

Respected Chairman,

Now, I will continue to explain the principles to serve as basis to designate the financial methods for submitting the Pyidaungsu Budget to the Pyidaungsu Hluttaw. I have already explained that a Financial Commission, led by the President, should be formed for President or a person, as signed by him to submit the draft of the Pyidaungsu Budget or the draft of the additional budget, on behalf of the Pyidaungsu Government; to give financial advice; and for the matters in connection with the enacting of laws and as signing of duties by the Pyidaungsu Hluttaw for the emergence of a firm financial system, in addition to the matters relating to the Pyidaungsu Budget containing budgets of Union territories, financial provisions by the Pyidaungsu funds to regions or states as necessary, financial as sistance and loans from the Union Fund Account. As the Chief Ministers of the regions or states are members of the Financial Commission, they can submit, discuss and seek help on the matters concerning financial needs for development of their regions or states. In this way all the regions and states will achieve equitable development momentum.

Respected Chairman,

 To submit to the Pyidaungsu Hluttaw the draft of Pyidaungsu budget containing the Pyidaungsu budget, the distribution of appropriate funds from Union Fund Account to regions or states, the provision of funds as a special issue and loans permission; and the draft of financial allotment, the Financial Commission is to submit them to the President of the State. The drafts may include: (a) salary and allowance of heads and members of organizations set up according to the Constitution of the State and expenditures of those organizations at Union level; (b) debts the Union has to settle, expenditures related to those debts, and other expenditures related to money borrowed by the Union; (c) expenditures to be paid according to verdict or order or decree released by the court or a particular tribunal; and (d) other expenditures to be paid according to a particular existing law or a particular in ternational treaty. As those expenditures are to be settled without fail, the Pyidaungsu Hluttaw should not turn down the proposal or deduct the amount of expenditure when approval is sought from the Pyidaungsu Hluttaw. However, representatives of the Pyidaungsu Hluttaw should be allowed to make discussion and suggestion as to the matter of expenditure. The Pyidaungsu Hluttaw should exercise in accord with majority consent the right to pass approval and to make rejection and deduction for other expenditures, save those mentioned above. Regarding the budgets of regions or states, Region or State Hluttaws should follow in the Pyidaungsu Hluttaw's footsteps.

 Respected Chairman,

Detailed basic principles relevant to finance including the formation of the Financial Commission are:

(a) The budgets of Union ministries and of organizations at Union level are to be checked under the aegis of a Vice-President nominated by the President of the State, and budget appropriations of Union ministries and organizations at Union level are to be submitted to the Financial Commission.

(b) The budgets of regions or states are to be checked under the aegis of the other Vice-President nominated by the President of the State, and budget appropriations of the regions or states are to be submitted to the Financial Commission.

(c) To submit to the Pyidaungsu Hluttaw the draft of Union budget containing the Union budget with the expenditures of Union territories, the distribution of appropriate funds from Union Fund Account to regions or states, the provision of funds as a special issue and loans permission; or the draft of financial allotment; to give suggestions on financial matters worth undertaking; and to carry out the duties assigned by the Pyidaungsu Hluttaw through the promulgation of law, the Financial Commission is to be formed with following persons:

1. The President Chairman

2. The Vice-Presidents Vice-Chairmen

3. The Pyidaungsu Attorney-General Member

4. The Pyidaungsu Auditor-General Member

5. The Chief Ministers of Regions and States Members

6. The Yangon City Council Chairman Member

7. The Pyidaungsu Minister for Finance ÊSecretary

(d) (1) When forming the Financial Commission, the President of the State has the right to appoint a suitable person as a member on a temporary basis, if the post of member remains vacant for a certain reason.

(2) The President of the State is to announce the formation of the Financial Commission. However, orders and directives necessary for the Financial Commission can be announced by either the President of the State or the person to whom duties are assigned by the President of the State.

(e) To submit to the Pyidaungsu Hluttaw the draft of Union budget containing the Union budget, the distribution of appropriate funds from Union Fund Account to regions or states, the provision of funds as a special case and disbursing of necessary loans, the Financial Commission is to submit them to the President of the State.

(f) The Financial Commission, if need be, may seek advice from finance experts.

(g) On behalf of the Union Government, the President of the State or the person to whom duties are assigned by the President of the State is to submit the draft of the Union budget to the Pyidaungsu Hluttaw.

(h) (1) Salary and allowance of heads and members of organizations set up according to the Constitution of the State and expenditures of those organizations at Union level;

(2) debts the Union has to settle, expenditures related to those debts, and other expenditures related to money borrowed by the Union;

(3) expenditures to be paid according to verdict or order or decree released by the court or a particular tribunal; and

(4) other expenditures to be paid according to a particular existing law or a particular international treaty, for which discussions can be held at the Pyidaungsu Hluttaw. However, rejection and deduction are not allowed.

(i) The Pyidaungsu Hluttaw should exercise in accord with majority consent the right to pass approval and to make rejection and deduction for other expenditures, save the expenditures mentioned in above paragraph (h).

(j) The Union Government is to take necessary steps according to the Union budget law enacted by the Pyidaungsu Hluttaw.

(k) Additional funds allotment law is to be enacted in accord with the procedures mentioned above, if appropriations and permitted expenditure contained in the Union budget law promulgated by the Pyidaungsu Hluttaw for the fiscal year concerned in addition to the appropriations of extra income and expenditure are necessary to be allowed.

(l) The Union Government is to take necessary steps according to the additional funds allotment law enacted by the Pyidaungsu Hluttaw.

(m) Region or State Hluttaws concerned are to be in harmony with majority consent to exercise the right to pass approval and to make rejection and deduction to the budgets of regions or states through negotiation on the chief minister concerned including the funds received by respective regions or states from the Union Fund Account according to the Union budget law or the additional fund allotment law. In doing so:

(1) salary and allowance of heads and members of organizations set up according to the Constitution of the State and expenditures of those organizations at Union level;

(2) salary and allowance of heads and members of leading bodies of self-administered area set up according to the Constitution of the State and expenditures of those bodies;

(3) debts the region or state has to settle, expenditures related to those debts, and other expenditures related to money borrowed by the region or state;

(4) expenditures to be paid according to verdict or order or decree released by the court or a particular tribunal; and

(5) other expenditures to be paid according to a particular existing law enacted by Region or State Hluttaw, for which discussions can be held at the Region or State Hluttaw. However, rejection and deduction are not allowed.

(n) Taxes to be collected according to the law of the region or state and to be put in the Region or State Fund Account are as follows:

(1) land tax,

(2) excise,

(3) water tax, embankment tax of dams and embankments the region or state has the right to manage, and tax on the use of electricity produced by such facilities managed by the region or state,

(4) tolls from roads and bridges the region or state has the right to manage,

(5) (aa) royalty collected from fresh water fisheries, (bb) royalty collected from marine fisheries located in limited distance,

(6) tax collected according to vehicles and vessels law of the region or the state

(7) other benefits and profits reaped from the sale and rent of property owned by the region or state,

(8) charges, taxes and other incomes realized from services provided by the region or state,

(9) fines imposed at Region or State Judicial Hluttaws including Region or State courts, taxes and other incomes collected for services provided,

(10) interests realized from the lending of money of the region or state funds,

(11) profits realized from investment made by the region or state,

(12) taxes collected for extraction of such items from forests in the region or state, (aa) taxes collected on all other timber except teak and designated hard woods (bb) taxes collected on firewood, charcoal, rattan, bamboo, birdnest, cutch, thanetkha, turpentine, eaglewood, and honey-based products

(13) registration fees

(14) taxes on entertainments

(15) salt tax

(16) funds received from the Union Fund Account

(17) contributions by organizations relevant to development affairs in the region or state

(18) unclaimed cash and property

(19) treasure trove

(o) The region or state has the right to use their funds in accord with the law.

(p) Except the taxes to be collected by the region or state, the Union is to collect all other taxes according to law and put them in the Union Fund Account.

(q) On condition that incomes and types of taxes to be collected by the region or state are to be gathered by the regions or states, the Union is to collect them according to law and put them in the Union Fund Account.

(r) The Union has the right to use the Union Fund Account in accord with the law.

Respected Chairman,

I have now dealt with the detailed basic principles relevant to finance in addition to the formation of the Financial Commission as well as the detailed basic principles that should be adopted for the list of taxes that should be collected by the Union and the regions or states and the distribution of funds. Therefore, the delegates to the National Convention are to give suggestions as to whether the detailed basic principles relevant to financial matters should be laid down or not.